January Jobs Report: U.S. Gains 157,000 Jobs, Unemployment Rate Up

WASHINGTON -- U.S. job growth grew modestly in January and gains in the prior two months were bigger than initially reported, supporting views that the economy's sluggish recovery was on track despite a surprise contraction in output in the final three months of 2012.

Employers added 157,000 jobs to their payrolls last month, the Labor Department said on Friday. There were 127,000 more jobs created in November and December than previously reported. The unemployment rate, however, edged up 0.1 percentage point to 7.9 percent.

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Coming on the heels of data on Wednesday showing a surprise contraction in gross domestic product in the fourth quarter, that should ease any worries the economy was at risk of recession, even though the unemployment rate ticked up. The GDP contracted at a 0.1 percent annual rate in the fourth quarter, largely because of a sharp slowdown in the pace of inventory accumulation and a plunge in defense spending. A monster storm that hit the East Coast in late October also weighed on output, a drag that should lift this quarter.

Federal Reserve officials said on Wednesday that economic activity had "paused," but they signaled optimism the recovery would regain speed with continued monetary policy support. The Fed left in place a monthly $85 billion bond-buying stimulus plan. Economists polled by Reuters had expected employers to add 160,000 jobs and the unemployment rate to hold steady at 7.8 percent last month.

The Labor Department also published benchmark revisions to payrolls data going back to 2008. It said the employment level in March 2012 was 422,000 higher on a seasonally adjusted basis than previously reported. It also introduced new population factors for its survey of households from which the unemployment rate is calculated. This had a negligible effect on the major household survey measures.

Modest Job Growth

Job growth in 2012 averaged 181,000 a month, but not enough to significantly reduce unemployment. Economists say employment gains in excess of 250,000 a month over a sustained period are needed.

Though the unemployment rate dropped from a peak of 10 percent in October 2009, that was mostly because some unemployed Americans gave up the search for work because of weak job prospects. The share of the working age population with a job has been below 60 percent for almost four years. All the job gains in January were in the private sector, where hiring was as broad-based as it was in December and declines in public sector employment remained moderate.

Steady job gains could help the economy weather the headwinds of higher taxes and government spending cuts. A payroll tax cut expired on Jan. 1 and big automatic spending cuts are set to take hold in March unless Congress acts.

Construction jobs are expected to rise further as the housing market recovery gains momentum. Housing is expected to support the economy this year, taking over the baton from manufacturing.

Within the vast private services sector, retail jobs increased by a solid 32,600 jobs after rising 11,200 in December. Retail employment has now risen for seven straight months. Education and health payrolls added 25,000 jobs in January after employment grew by the most in 10 months in December.

Government payrolls dropped by 9,000 last month after falling 6,000 in December. The pace is moderating as local government layoffs, outside education, subside.

Average hourly earnings rose four cents last month. Hourly earnings have been rising steadily. They were up 2.1 percent in the 12 months through January.

"It may be that we are now getting to a point in the labor market where we are going to see an upward creep in average hourly earnings," said RDQ Economics' Ryding, chief economist at RDQ Economics in New York.

"That's going to be good for the consumer and they need help because they are being whacked by the payrolls tax increase," he said before the release of the report.

The length of the workweek for the average worker was steady at 34.4 hours for a third straight month.

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email4rmw

How did the majority of voters not see this continued sad comentary not coming. Just look at the first four years of poor results. Reagan dealt with worse and by this time (2nd tern) GDP growth was 7%+.........

President Obama ended his first term tied with George W. Bush, and Jimmy Carter as one of the three worst Presidents in contemporary US history! Entering his second term, the young American President is acting as if he would like to secure the position of worst President, all to himself, and he may be succeeding.Classifying people who make $150K to $450K, as middle class so that he can give them "middle-class tax breaks," was a disgraceful act. Attempting to divert attention away from ugly unemployment statistics, the President is playing gun control to the hilt, employment, well, maybe later.Capitulating on the debt ceiling, exempting "religious" from some healthcare obligation, executive order in the gun-control area, all seem to forget that nearly 30,000,000 Americans are either under, or unemployed.Indications are that before Obama's second term ends the position of worst President ever should be his, and only his; what a sad state!

Wait until this wanna be King does after he continues cutting defense. This is very disturbing. I've worked in Defense for a long time and these are dangerous time. We our opening ourself up for more attacks. So many out there hate us and want our destruction.

lol Like sheep being led to slaughter. First, "seasonal adjustments" are a way to make numbers LOOK better than they really are. And then these numbers DO NOT include people that have fallen out of the "system" The private ( non partisan) employment corporations have realtime unemployment anywhere from 20 to 24%, with places like Detroit being near 50% and California and Nevada being in the high 20's ( Reid and Pelosi go figure ) But Hey it's getting better....NOT

This media is bunch of liars! The keep talking too about Retail jobs up. Who can live on a retail job! Those jobs do NO GOOD FOR PEOPLE THAT HAVE TO EARN A LIVING TO SUPPORT A FAMILY OR SUCH. Retail is a job for housewifes, school kids and some retirees. Cut the sh------, the JOB MARKET STINKS and has for several years.

He has been millions of times so far and will continue to be the excuse of the decade it is always so easy to finger point than to roll up the sleeves and take care of the problems, blame is popular since 2008

It is all spin. YOU cannot trust anything the Fed puts out i(esp. on mainstream liberal owned media outlets) on jobs reports or even where the DOW is, because none of them are accurate indicators of the economy or nation as a whole as they once used to be.

Obama has people who are trying to put a positive spin on anything (through Facebook to MSNBC) out there to make him look good still, just like his bogus jobs council which he recently disbanded after he got re-elected 2nd term. Those who own them are the "richest" of the nation and extremely liberal and all Obama campaign supporters and use their netwroks to confuse, misinform, and misguide people from the youngest ages possible sadly. A kind of "brainwashing" effect if you will.

As a US Small Business owner, and someone who has (2) signed letters back from President Obama on White House stationary to questions I posed to him in 2009 & 2012, it is very clear he does not care about small businesses nor reality as it truly is in the economy, and lives in some form of fantasy mindset and is interested in ONLY pushing his personal agenda and ego along with it at any cost.